NC Treasurer Demanding Disclosure For Funds in State
Retirement Plans

November 19, 2003 (PLANSPONSOR.com) - North
Carolina's treasurer said he would insist that mutual funds
and others handling the state's $58 billion in retirement
money provide better disclosure of fees and place limits on
trading by their employees.

The extra disclosure requirements by Richard Moore
come in addition to requirements he will make that funds
provide an annual statement of charges, disclose the
compensation packages of their managers, and realign their
boards so that at least two-thirds of directors are
independent.
All of which, Moore says, is his right as a customer
to demand, according to a New York Times report.

“I, as a customer, am demanding a higher level of
service,” Moore said in a Times interview.
Moore is also urging other pension fund manager to
managers to adopt the latest principles.

Among the companies that will be receiving the
guidelines from Moore are:

Fidelity Investments

Putnam

T. Rowe Price

Vanguard

Federated

Oppenheimer

Van Kampen

American Funds.

Moore will be asking
all companies that manage mutual funds offered in the
state’s $2.3 billion employee 401(k) plan or manage any
portion of North Carolina’s $56 billion pension plan to
follow these principles. Funds that do not adopt the
guidelines risk losing the state’s business, Moore told the
Times.

Additionally, Moore will be asking fund managers to
follow a requirement that the fund’s annual report disclose
the shares owned by its manager, along with a record of all
purchases and sales of shares by that manager in the
previous 12 months.
Moore also wants fund managers to hold, for at least
a year, any shares they buy in one of their company’s
funds.

This in comes in response to PBHG Funds, which
dismissed its co-founders last week, and could face
action from regulators later this week. The ousters came
following the resignation ofHarold Baxter, chairman and chief executive of
Pilgrim Baxter & Associates, and Gary Pilgrim, after
an internal probe focused on investments made by Pilgrim
into a private investment limited partnership that, with
Baxter’s knowledge, bought and sold shares in Pilgrim
Baxter funds between March 2000 and December 2001.
“(The) review has brought into focus conduct that was
not, in our view, consistent with the highest standards
of professional
behavior
,” David Bullock, who has taken over as Pilgrim Baxter
chief executive, said in a statement (See
Pilgrim Baxter Founders Resign
).

Moore is no stranger to mutual fund letters.
Earlier this month, he sent a letter to the chairman
of Alliance Capital Management, which manages $6.4 billion
for the state pension plan, saying that North Carolina was
reviewing that arrangement after the disclosure that some
Alliance employees had allowed investors to trade in and
out of the firm’s funds. The state expects that review to
be completed by the end of this month, the letter said
(See
Tar Heel State Opens Alliance Inquiry
).